Return to site

Learn How Bitcoin Works-What Is Ether-Lesson 34

The Fuel Of The Ethereum Network

· Bitcoin,BitClub Network,Crypto Currency,Cryptocurrency,Cryptocoins
If you want to purchase Bitcoin as an investment and you want to join the BitClub Network Company, so that BitClub can mine Bitcoin and other Crypto Currency on your behalf to grow a stable and increasing investment for you, please Join BitClub Here For Free. Once you join, you will be set up with a free lead account and receive follow up emails detailing how you can create a Bitcoin investment account with The BitClub Network. For any answers to questions Contact Clyde Thorburn Here.

Invest in Bitcoin and other types of Crypto Currency and Crypto Coins by joining the BitClub Network.

Author : Coindesk : Alyssa Hertig.
 

What is Ether? As we explored in "What is Ethereum?" at https://www.coindesk.com/information/what-is-ethereum/ Ethereum aims to function both as a kind of decentralized internet and a decentralized app store, supporting a new type of application (a "dapp") in the process. But while no one owns Ethereum, the system that supports this functionality isn't free. Rather, the network needs 'ether', a unique piece of code that can be used to pay for the computational resources needed to run an application or program. Like bitcoin, ether is a digital bearer asset (similar to a security, like a bond, issued in physical form). Just like cash, it doesn't require a third party to process or approve a transaction. But instead of operating as a digital currency or payment, ether seeks to provide "fuel" for the decentralized apps on the network. While this might sound complicated, you can think of a more concrete example of how tokens might power a user experience. Let's go back to the example of a decentralized online notebook. To post, delete or modify a note, you need to pay a transaction fee in ether to get the network to process the change. In this way, 'ether' has sometimes been called 'digital oil', and taking this analogy further, Ethereum transaction fees are calculated based on how much 'gas' the action requires.
 

Each action costs an amount of gas that's based on the computational power required and how long it takes to run. A transaction costs 500 gas, for example, which is paid in ether. As an economic system, the rules for ether's economy are a bit open-ended. While bitcoin has a hard cap of 21 million bitcoins, ether does not have a similar limit. Of the ether that does exist, 60m was purchased by users in a 2014 crowd funding campaign. Another 12m ether went to the Ethereum Foundation at https://www.ethereum.org/foundation a group of researchers and developers working on the underlying technology. Every 12 seconds, 5 ethers (ETH) are also allotted to the miners that verify transactions on the network. Eighteen million ether, at most, are mined per year. Five Ethereum are created roughly every 12 seconds, whenever a miner discovers a block, or a bundle of transactions. So, no one knows the total number of ether yet, and the pace of ether creation will be less clear after 2017 when Ethereum plans to move to a new proof-of-stake consensus algorithm. This will probably lead to a change in the rules of ether creation, and thus the mining subsidy might decrease. For more information, see "How Ethereum Works" at https://www.coindesk.com/information/how-ethereum-works/ and "How to Use Ethereum" https://www.coindesk.com/information/how-to-use-ethereum/.
 

Read more about Bitcoin and The BitClub Network.

All Posts
×

Almost done…

We just sent you an email. Please click the link in the email to confirm your subscription!

OKSubscriptions powered by Strikingly